Category Archives: Trade

DEUTSCHE BANK: The risk of a full-blown trade war between the US and China is rising – Business Insider

The risk of a serious trade war between the world’s two largest economies has sharply increased, according to analysts at Deutsche Bank

And it may be down to a product known as distillers’ dried grains, an ingredient in animal feed.

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Last week China increased anti-dumping tariffs on US imports of the grains from 33.8% to as much as 53.7%.

DEUTSCHE BANK: The risk of a full-blown trade war between the US and China is rising – Business Insider

Trump Picks Peter Navarro for Trade and China Hits the Panic Button | Observer

Navarro (an Observer contributor) has always felt that America was in a trade war with China and that “free trade” was a fiction endorsed by academic economists with no understanding of the real world. A recent research paper by professors David Autor (MIT), David Dorn (University of Zurich) and Gordon Hanson (UC San Diego) entitled The China Shock reinforces Navarro’s argument that China’s predatory trade practices will devastate large swaths of America. Adding more weight to this narrative is the fact that in 2015, Princeton University economist Angus Deaton won a Nobel Prize for his research showing that deindustrialization in the United States is responsible for a host of social ills including drug addiction, suicide and a surge of early deaths.

Just as the Boxers sent shockwaves through the West, so has Trump’s appointment of Navarro in China. …

Trump Picks Peter Navarro for Trade and China Hits the Panic Button | Observer

Chinese media alarmed at Trump trade adviser, warn of U.S. showdown | Reuters

Chinese state media on Friday expressed alarm and warned of a “showdown with the U.S.” after President-elect Donald Trump named Peter Navarro, an economist who has urged a hard line against China, to head a new White House National Trade Council.

And the Chinese Ministry of Commerce stressed that China-U.S. trade benefits both sides, warning Washington’s new administration against moves that may hurt ties.

Navarro is an academic and one-time investment adviser who has authored books such as “Death by China: How America Lost its Manufacturing Base”. The book was made into a documentary film about Beijing’s desire to become the dominant economic and military power in Asia.

Chinese media alarmed at Trump trade adviser, warn of U.S. showdown | Reuters

Could Trump’s chest-thumping over China trigger a trade war? | Business | The Guardian

Between the US president-elect’s campaign promises of tariffs to his phone call with Taiwan, Trump has frequently rattled Beijing. But is it bluster, or a sign of a seismic global economic shake-up?

Louis Kuijs, head of Asia economics at Oxford Economics and a former senior China economist at the World Bank, said it was “more legitimate now than at anytime in the last 10 years to talk about the risk of something pretty close to a trade war”, he said.

“Anyone with a stake in Chinese exports, especially to the US, should be worried,” said Kuijs, adding that US and European companies that assemble products in China would also see their bottom lines affected.

Could Trump’s chest-thumping over China trigger a trade war? | Business | The Guardian

Japan Inc warns of global trade contraction under Trump presidency: Reuters poll | Reuters

Corporate Japan is bracing for a rocky ride under incoming U.S. President Donald Trump, a Reuters poll showed, with well over a third of firms seeing a contraction in global trade as concerns about a rise in U.S. protectionism threaten to shatter a fragile economic recovery.

Fully three-quarters of Japanese companies expect no expansion in world trade, highlighting festering anxiety that Trump’s fiery protectionist rhetoric during campaigning might turn into growth-sapping policies through his four-year term that begins in January.

Throughout the campaign that led to his upset election win, the Republican president-elect pledged to redraw trade deals to win back American jobs. He has threatened Mexico and China with punitive tariffs that some economists have warned could spark a trade war that could potentially roll back decades of liberalization.

Japan Inc warns of global trade contraction under Trump presidency: Reuters poll | Reuters

Minxin Pei: The future of US-China relations is now anyone’s guess – Nikkei Asian Review

COLLISION COURSE This is by far the worst-case scenario. If Trump fulfills his pledge to impose punishing tariffs on Chinese goods — under U.S. law he can authorize a 15% import duty for 150 days without congressional approval — exports from China to the U.S. would plummet. An estimate by HSBC suggests that in an extreme, albeit unlikely scenario, imposing a 45% levy in tariffs would see Chinese exports to the U.S. cut in half and result in a 2% fall in China’s gross domestic product. A 10% increase in U.S. import duties on Chinese goods, a more likely move, could reduce Chinese exports to the U.S. by 17%. Beijing would likely retaliate by targeting American companies that sell a large quantity of their products to China, with Boeing, Apple and General Motors the most vulnerable.

Minxin Pei: The future of US-China relations is now anyone’s guess – Nikkei Asian Review

Consequences of a U.S.-China Trade War | RealClearWorld

China’s economy is still heavily reliant upon exports, especially exports to the United States. Diminished returns from free trade will put increased pressure on China’s already weakened economy, and the likelihood of civil unrest in the country will increase. China is a large economy, mostly by virtue of its population.  GDP per capita remains just below $8,000, and that GDP is not equally distributed, meaning the common Chinese has little wiggle room before economic contraction becomes catastrophic. Put simply, China can ill afford to reduce exports.

Trump’s victory reflects dissatisfaction with globalization in the United States. …

China is thus faced with a “Hobson’s choice.” If Beijing attempts to accommodate American demands, it risks domestic unrest as its economy contracts. If China refuses to accommodate changes, then it risks a punitive American response, potentially producing a trade war it cannot afford. China cannot even threaten to cut off production access in the long term, as Washington could simply return to the TPP to fill that need.

Consequences of a U.S.-China Trade War | RealClearWorld

Serious Risks Of Trump Presidency For The Asian Economy

Just when China’s economy seemed to be stabilizing, Donald Trump’s election as U.S. president poses significant new risks. Not just for Chinese growth, but the entire Asia region.

That’s because the president-elect campaigned on a policy platform with protectionism at its center. Trump wants to slap punitive tariffs on Chinese goods and label the world’s No. 2 economy a currency manipulator.

Such a move would hurt Chinese exports. But it could also trigger a trade war if Beijing retaliates, catching other Asian economies in the crossfire.

Serious Risks Of Trump Presidency For The Asian Economy

China threatens to cut sales of iPhones and US cars if ‘naive’ Trump pursues trade war | World news | The Guardian

During the acrimonious race for the White House Trump repeatedly lashed out at China, vowing to punish Beijing with “defensive” 45% tariffs on Chinese imports and to officially declare it a currency manipulator.

On Monday the state-run Global Times warned that such measures would be a grave mistake.

“If Trump wrecks Sino-US trade, a number of US industries will be impaired. Finally the new president will be condemned for his recklessness, ignorance and incompetence,” the newspaper said in an editorial.

The Global Times claimed any new tariffs would trigger immediate “countermeasures” and “tit-for-tat approach” from Beijing.

China threatens to cut sales of iPhones and US cars if ‘naive’ Trump pursues trade war | World news | The Guardian

What a surprise! Who could have thought that China would retaliate over US tariffs?

I have always said that I hate trade with China. Obviously a trade war will bring problems in the short term, but ultimately the US will be better off not being dependent on a hostile nation. China, of course, will be in serious trouble over a trade war.

Globalization and its New Discontents by Joseph E. Stiglitz – Project Syndicate

Branko Milanovic’s new book Global Inequality: A New Approach for the Age of Globalization provides some vital insights, looking at the big winners and losers in terms of income over the two decades from 1988 to 2008. Among the big winners were the global 1%, the world’s plutocrats, but also the middle class in newly emerging economies. Among the big losers – those who gained little or nothing – were those at the bottom and the middle and working classes in the advanced countries. Globalization is not the only reason, but it is one of the reasons.

Under the assumption of perfect markets (which underlies most neoliberal economic analyses) free trade equalizes the wages of unskilled workers around the world. Trade in goods is a substitute for the movement of people. Importing goods from China – goods that require a lot of unskilled workers to produce – reduces the demand for unskilled workers in Europe and the US.

Globalization and its New Discontents by Joseph E. Stiglitz – Project Syndicate